Making Tax Digital Checklist for VAT and Income Tax

A Making Tax Digital checklist comes down to six things: confirm you’re in scope, gather your registration details, sign up through HMRC, connect compatible software, keep the required digital records, and file on the schedule that applies to you. The rules already cover every VAT-registered business, and from 6 April 2026 they extend to self-employed people and landlords with qualifying income above £50,000.¹

Step 1: Check Whether You’re in Scope

Making Tax Digital operates on two separate tracks with different timelines.

If you are VAT-registered, you are already in. Since April 2022, all VAT-registered businesses have been required to keep digital records and file through compatible software, regardless of turnover.² The VAT registration threshold rose from £85,000 to £90,000 on 1 April 2024.³

For self-employed people and landlords, Income Tax joins in phases. From 6 April 2026, the rules apply if your qualifying income exceeded £50,000 in the 2024 to 2025 tax year. From 6 April 2027, the threshold drops to £30,000, based on your 2025 to 2026 return.¹ Qualifying income is your gross income from self-employment and property before expenses. If you have more than one source, HMRC adds them together, and it uses your Self Assessment return to decide whether you cross the line.⁴

Companies filing Corporation Tax are outside this programme. HMRC confirmed in July 2025 that it does not intend to bring Corporation Tax into Making Tax Digital and will develop a separate approach instead.

Step 2: Gather Your Registration Details

What you need depends on which side you’re signing up for.

For MTD for VAT, have ready your nine-digit VAT registration number from your VAT certificate,⁵ your Government Gateway user ID and password, the date you first became VAT-registered (entered exactly as shown on the certificate), and the postcode of your main business premises. Keep your most recent VAT return nearby, because the sign-up service may ask security questions based on past submissions.⁶

For MTD for Income Tax, you must already be registered for Self Assessment and have filed a return within the last two years. During sign-up you’ll need the date you started your business or began receiving property income, your business name and address, and the nature of your trade. If you have more than one self-employment or property income source, you’ll be asked to check each one and add anything the system hasn’t picked up.⁷

One automatic carve-out: if you don’t have a National Insurance number on 5 April, you’re exempt from MTD for the following tax year without applying.

Step 3: Sign Up Through HMRC

For VAT, go to the GOV.UK page titled “Sign up for Making Tax Digital for VAT,” log in with your Government Gateway credentials, enter the details from your VAT certificate, and submit. HMRC confirms by email within 72 hours.⁸ Do not file through your software before the confirmation arrives. Once it does, stop using the old manual submission portal.

For Income Tax, sign in with the user ID and password you use for Self Assessment. HMRC may ask you to verify your identity through its photo-matching app (comparing your face to your passport or driving licence) or by answering questions from information it already holds, such as figures from a P60 or recent payslip.⁷ You then confirm the tax year you’re starting from and review each income source. Compatible software must be connected before your first quarterly deadline.

Step 4: Connect Compatible Software and Digital Links

Your software must talk to HMRC’s systems through an API. HMRC publishes a software finder tool where you can search for compatible packages.⁹ If you already use a product for MTD for VAT, check whether it also covers Income Tax. Some do, some don’t.

Spreadsheets are still allowed if you use bridging software to submit the data. Bridging software reads XLSX, XLS, or CSV files and handles the API connection.

Where more than one application is involved in your record-keeping, each must be connected to the next by a digital link, meaning data moves between them without anyone retyping or copying and pasting. Acceptable methods include importing and exporting XML or CSV files, API transfers, and using a spreadsheet’s built-in “get data” function.¹⁰ Copying a figure from one screen and pasting it into another is not a digital link. Sending data to an accountant or bookkeeper by email or on a pen drive is acceptable, provided nobody retypes the numbers along the way.

Step 5: Keep the Right Digital Records

Under Regulation 25A of the VAT Regulations 1995, VAT-registered businesses must keep records in compatible software. The required designatory data is your business name, principal business address, VAT registration number, and any VAT accounting schemes you use, such as the Flat Rate Scheme or cash accounting.

For each supply you make, your records must capture the tax point, the net value excluding VAT, and the rate of VAT charged. You must record total output tax split between standard-rate, reduced-rate, zero-rate, exempt, and outside-the-scope supplies. For supplies you receive, record the tax point, the value, and the input tax you intend to claim.¹⁰

Some sensible simplifications exist. Employee expense claims covering multiple purchases can go in as a combined total. Petty cash purchases under £50 each can be grouped, up to £500 per entry. Supplier statement totals can replace individual invoices as long as every supply falls within the same return period.¹⁰

For MTD for Income Tax, the record-keeping is simpler: record income and expenses in compatible software as they occur, and the software sends summary figures to HMRC.

Step 6: File on the Right Schedule

For VAT, once your MTD account is active you authorise your software to communicate with HMRC. The software compiles the nine-box return from your digital records and submits it directly, giving you a receipt ID.¹¹ You can verify a filing in your digital tax account.

For Income Tax, you send quarterly updates instead of one annual return. For the first year of the scheme (2026 to 2027, applying to those above £50,000), the deadlines are 7 August 2026 for the quarter covering 6 April to 5 July, 7 November 2026, 7 February 2027, and 7 May 2027. A final declaration is due by 31 January 2028; this replaces the traditional Self Assessment return and is where adjustments, allowances, and confirmations are made.¹²

Penalties for Missing Deadlines

HMRC runs a points-based system for late submissions and a percentage-based system for late payments. The two operate independently, so you can be charged under both at once.

Each missed submission earns one point. No fine is triggered until you hit the threshold: four points for quarterly filers (including MTD for Income Tax) and two for annual filers. At the threshold, HMRC charges £200, with a further £200 for every subsequent miss.¹³ Points can reset to zero, but you must file on time for a continuous compliance period (12 months for quarterly filers, 24 months for annual filers) and have submitted everything due within the past 24 months.¹⁴

For late payments, nothing applies within 15 days of the due date. From day 16 to 30, the penalty is 3% of the tax still owed at day 15. From day 31, a further 3% of what remains unpaid at day 30 is added, plus a daily charge at an annual rate of 10% on the outstanding balance until you pay or up to two years pass. Interest also accrues on top at HMRC’s standard rate.

If you have a reasonable excuse or believe a penalty is wrong, you have 30 days from the date it was issued to appeal. Include the date you tried to file or pay and any error message if the problem was technical.¹⁵

If You Can’t Use Digital Tools

The rules recognise digital exclusion. You can apply for an exemption on grounds of age, disability, location without reliable internet access, or membership of a religious community whose beliefs are incompatible with electronic records.¹⁶ To apply, contact HMRC using the Self Assessment general enquiries details. Explain how you currently file, why you consider yourself digitally excluded, and whether you have an agent. Apply before your mandate start date if you can. If you’ve already signed up and your circumstances change, apply for the exemption but keep using MTD until HMRC responds.¹⁷

If You Use an Accountant

Your accountant needs their own agent services account with HMRC, linked to their existing Self Assessment agent codes. Once you’ve authorised them, either through a digital handshake in the agent services account or by linking existing Self Assessment authorisations, they can sign you up and file on your behalf.¹⁸ Linking the authorisation is not the same as signing you up: that is a separate action the agent takes afterwards.

1
GOV.UK. Find Out if and When You Need to Use Making Tax Digital for Income Tax
2
GOV.UK. Making Tax Digital for VAT Is Coming – Are You Ready
3
GOV.UK. Increasing the VAT Registration Threshold
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GOV.UK. Work Out Your Qualifying Income for Making Tax Digital for Income Tax
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HMRC Design Patterns. VAT Registration Number
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GOV.UK. HMRC Online Services: Sign In or Set Up an Account
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GOV.UK. Sign Up for Making Tax Digital for Income Tax
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GOV.UK. Sign Up Your Client for Making Tax Digital for VAT
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GOV.UK. Choose the Right Software for Making Tax Digital for Income Tax
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HM Revenue & Customs. VAT Notice 700/22: Making Tax Digital for VAT
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HM Revenue & Customs. How to Fill In and Submit Your VAT Return (VAT Notice 700/12)
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GOV.UK. Dates You Need to Know for Making Tax Digital
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GOV.UK. Penalties for Making Tax Digital for Income Tax
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GOV.UK. Penalties for Late Submission
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GOV.UK. Disagree With a Tax Decision or Penalty
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ICAEW. Digitally Excluded Can Now Apply for MTD Exemption
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GOV.UK. Apply for an Exemption From Making Tax Digital for Income Tax
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HM Revenue & Customs. Add Your Client Authorisations for Making Tax Digital for Income Tax